document.write( "Question 38464: Could you please explain how the rule of 72 works. I understand that it is an easy way to figure out how many years it would take to double your money, but I get very confused about why it works. How do I use a logrithm to solve it? I just don't understand logs at all. I know that they are exponents, right? I'm lost \n" ); document.write( "

Algebra.Com's Answer #24005 by Nate(3500) $\"\"$ $\"About$

You can put this solution on YOUR website!
Another way to express total amount with interest compouned continously is:
\n" ); document.write( " $\"P%28a%29+=+a%281%2Br%29%5Et\"$ where P(a) is the total amount, 'a' is the initial amount, 'r' is the rate, 't' is the time in years
\n" ); document.write( "Now, if your rate is 4% per year, than you get one whole value of the initial amount with the 4% of the initial amount per year.
\n" ); document.write( "Let us say you save $10 for 2 years with 4%
\n" ); document.write( " $\"P%28a%29+=+10%281%2B.04%29%5E2\"$
\n" ); document.write( " $\"P%28a%29+=+10%281.04%29%5E2\"$
\n" ); document.write( " $\"P%28a%29+=+10.816\"$
\n" ); document.write( "You would get about eighty two cents for the two years. Add the initial amount to get the total amount. Also, I have a lesson about logarithms that can help you. \n" ); document.write( "

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